What Is General Liability Insurance?
If you’re an entrepreneur, contractor or owner of a small business, you need General Liability Insurance.
General Liability Insurance is a business insurance policy that is applicable to most contractors and business owners because it protects them.
When a business has this type of insurance policy, they're covered when it comes to claims of bodily injury, associated medical costs and damage to property that occurred as a result of your business operations.
It also covers legal defense costs, along with settlements and judgments should you be successfully sued.
If you are a tenant who causes damage to a property that you rent (like, for example, a fire), that’s another situation where under a General Liability Insurance policy, you’d be covered.
Lastly, these types of policies cover claims of false or misleading advertising. That could include libel, slander or copyright infringement.
This type of insurance is often referred to as “Business Liability Insurance” or “Commercial Liability Insurance.” Call it whatever you’d like, but just make sure you have this policy in place - because not doing so could prove very costly.
Who Is Covered By General Liability Insurance?
Businesses and their Employees, Most commonly this coverage is for the business and its employees when claims are made against them from an outside party that bodily injury or property damage was caused as a result of business operations.
Wholesaler or Manufacturer However, if you sell any product and there is a chance a customer could become injured the General Liability is often your first line of defense even though the product is from a wholesaler or manufacturer. For example your coffee makes a customer is suing you.
Vendors If you work with vendors, like contract sales people, you may have a written agreement to indemnify a person/organization. Under this type of policy, these people & organizations are protected against liability claims as a result of selling your products.
What Are The Limits Of General Liability Insurance?
Most General Liability insurance policies cover up to 1 million per occurrence and 2 millions in aggregate, if you need additional coverage it is common to double the limits. If you need more than 2 millions per occurrence you most likely have to purchase an umbrella or excess insurance policy.
Why Do You Need General Liability Insurance?
As a small business owner, you may be legally responsible if another person gets hurt or if their property is damaged while at your business or because of something you did. Make sure your business is properly protected against risks or accidents.
General liability insurance coverage protects your small business against claims by others of bodily injury or damage to their property. However, it does not protect your own personal property.
You should consider general liability insurance coverage if you or your employees:
Interact with clients face to face - If you visit a client’s place of work, or clients visit yours, there is always the possibility someone could get hurt and require medical treatment.
Have access to customer’s property - If you own a cleaning company and one of your employees breaks a vase while vacuuming a carpet at a customer’s home, general liability insurance could cover the cost of the vase.
Use advertising to market your company - If you promote your company and accidentaly use wording that is under copyright or trademark, general liability insurance could cover you if a claim occurs.
Use third-party locations for any business related activities - For example, architects should make sure that they’re covered with architects’ general liability insurance for injury or damage that might happen at a job site.
Enter into contracts that required general liability insurance - For example, many construction companies must have general liability insurance in order to be eligible to be awarded certain contracts.
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